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A return of mainland visitors to Hong Kong and the introduction of the long-awaited "insurance connect" scheme in the Greater Bay Area will bring huge business opportunities for the city's insurance industry, according to regulators and industry players.
"Hong Kong's post-pandemic recovery should now not be viewed as a distant and unlikely dream but instead as a near-term prospect that ought to be generating confidence, optimism and greater investment from business," said Damien Green, Asia president and CEO of Manulife, one of the city's biggest insurance firms.
"The time has now arrived for the corporate sector to show optimism in the future of the city. Let's kick off the next 25 years under the One Country, Two Systems framework with great optimism."
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Hong Kong can provide a wide range of insurance cover to the 80 million residents of the bay area, Green said at the 2022 SCMP China Conference on Wednesday.
When Manulife surveyed more than 1,600 mainland Chinese residents last year, it found the vast majority planned to visit Hong Kong when the border reopens, while more than half intend to purchase insurance products here, Green said.
"Insurance penetration within the Greater Bay Area (GBA) is low at only 5.5 per cent compared to almost 21 per cent in Hong Kong," he said. "We fully expect that the GBA integration will exponentially increase the volume and velocity of mainland visitors to Hong Kong who are seeking personal financial protection solutions."
The bay area is a development zone mapped out by Beijing that aims to promote trade and capital flow among 11 cities in southern China to create an economic powerhouse similar to the bay areas in the US and Japan.
Mainland Chinese were the biggest spenders on Hong Kong insurance policies before the pandemic brought cross-border traffic to a standstill over the past two years. At the peak in 2016, they bought HK$72.68 billion worth of policies, representing 39 per cent of all premiums collected in the city.
The closure of the border to contain the Covid-19 pandemic cut down the number of mainland visitors by 98 per cent to just 65,921 last year, according to the Hong Kong Tourism Board. As such, they only spent HK$688 million on life and medical insurance policies in Hong Kong in 2021, represents a mere 0.4 per cent of the total, according to data from the Insurance Authority.